Northvolt plans to construct a multi-billion euro battery factory in Germany.

Northvolt to Build Electric Vehicle Battery Plant in Germany

Europe’s battery industry is set to receive a boost as Sweden’s Northvolt announces plans to invest several billion euros in building an electric vehicle battery plant in Germany. The move is a win for Europe, which had been concerned that Northvolt would divert planned investment to the United States. The plant, due to begin delivery in 2026, will ramp up to 60 gigawatt hours of capacity, enough to supply around 1 million electric vehicles with battery cells every year. Northvolt’s investment will create 3,000 direct jobs in Heide and thousands more in the surrounding industry and service sector.

German Subsidies and EU Framework

Northvolt could invest around 3-5 billion euros ($8.81 billion) in the plant and receive around half a billion euros in German subsidies, according to sources. The subsidies, if approved, would be the first granted by Germany under the European Union’s Temporary Crisis and Transition Framework, developed to support green industrial projects. The EU-Commission opened up a clear path towards securing important industrial investments in Europe, said German Economy Minister Robert Habeck.

Europe’s Battery Landscape

Northvolt and the state of Schleswig-Holstein signed a memorandum of understanding in March 2022 to develop a battery plant in the region, but the company later said it may prioritise expansion in the US ahead of Europe in light of more favourable subsidies and lower energy costs. A second plant could also be constructed in parallel elsewhere, a spokesperson said, indicating the decision to build in Germany did not exclude the possibility of a further plant in North America.

Other Players in Europe’s Battery Industry

Northvolt, alongside Volkswagen, is one of just a handful of European players paving the way for a home-grown battery industry, with a large chunk of planned capacity in Europe to be owned by Asian players. Taiwanese battery maker ProLogium announced on Friday it had picked France for its first overseas car battery plant.

Conclusion

Europe’s battery industry is set to receive a boost as Northvolt invests in building an electric vehicle battery plant in Germany. The move is a win for Europe, which had been concerned that Northvolt would divert planned investment to the United States. The plant will ramp up to 60 gigawatt hours of capacity, enough to supply around 1 million electric vehicles with battery cells every year. The subsidies, if approved, would be the first granted by Germany under the European Union’s Temporary Crisis and Transition Framework, developed to support green industrial projects.

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